Post-Diwali Decline Starts

The short term trend cracked and 3040-50 point support was conclusively breached on Friday. The intermediate trend however will only be confirmed as negative if the sensex falls below the 2940 mark which is not too far away.

The parameters of the trading ranges are now sharply defined. The intermediate trend will register conclusive lower bottoms if it falls below 2940 points. The intermediate trend will register a bullish reversal if it rises above 3346 points. The short term will show hopes of a reversal if it rises above first 3050 and then above 3175 points. The longterm bear market will shift direction only if the index rises above 3575 points.

 

When, the index crosses the 3175 zone there will be hope of an intermediate revival. The 3175 mark has established itself as a major resistance in the last month when the index has not been able to penetrate it. An intermediate

uptrend would have to start with a move past 3175 on better volumes.

The Sensex ended the week at 2965.66 points which was an enormous 5.53 per cent loss from last weeks close of 3139.02 points. The National Index ended with a similar loss of 5.18 per cent and a closing value of 1323.00 points. The BSE Dollex lost 4.82 per cent.

The broadest Allshares Index finished the week with a smaller loss of 1.79 per cent although it hit a new 104 week low. The advances versus declines lines wore a grim look with 589 advances versus 1088 declines and 165 scrips holding value.

The critical point for a long term reversal remains 3575 . The intermediate trend should go positive if the priceline jumps above 3345 and be confirmed as clearly negative at a reading below 2940. The short term trend has gone negative again with broken support at 3050 points. On the upside, there are successive resistance barriers at 3050, 3175, 3280 and 3345.